The adjustment of staff of the unitary government as per the spirit of the constitution has remained an unsettled problem in the process of federalisation of the nation. Operationalisation of federal values in Nepal has been a top agenda of all state and local governments since the country entered the federal democratic system. Article 302 (2) of the constitution enables the federal government to arrange for the continued delivery of services by making adjustments of the employees serving in the government services at the time of commencement of this constitution with the Federal, State and Local levels in accordance with the law. The Employee Adjustment Act 2017 was then enacted with a clear objective of adjusting the government employees in the federal, state and local governments. By March 2019, the federal government was able to adjust 100,031 civil servants in all three tiers of the government. It fell short of 37,000 employees to fill all the 137,614 posts of civil servants at all levels. In any case, it was claimed that the conclusion of the civil servant adjustment process was one of the biggest achievements of the government. Data released at that time show that more civil servants were adjusted under the central government. A total of 84,409 posts were created under the federal government, 22,297 posts under state governments and 66,908 posts under 753 local units.
Employees’ Grievance This means that 35 per cent of posts were created for the federation, 16 per cent posts for the states and 49 per cent for the local levels. However, 40,409 employees were adjusted in the federation, 14,659 employees were adjusted in the seven states and 31,043 employees were adjusted at the local levels. This shows that state governments and local levels did not get the required number of employees. While the government is still handling the grievances of the employees so adjusted, in the entire process, the federal government decided about the adjustment policy and procedures itself, without involving the states. The major concern of all state and local governments to this day remains that they have not been able to work according to the federal constitution because of the lack of necessary employees, and their impaired power of hiring and firing within their constitutional competences. But then there are other issues as well. The report of the Federalism Capacity Needs Assessment (FCNA), prepared by the government with the support of the World Bank and United Nations Development Programme (UNDP) provides an important baseline for the implementation of federalism and capacity building. The report identifies measurable progress in some areas. They include the setting-up of key institutional structures, strengthening of the regulatory environment and strong initial progress in the adjustment of personnel at all levels of the government. The report states that in the first two years of their operation, the state and local governments have accounted for about 34 per cent of the national budget significantly boosting their fiscal responsibility. It has also highlighted the areas of improvement. It takes stock of gaps that still exist between the needs and existing capacity at all levels of government to manage new functions. The need for a strategic approach to capacity enhancement, including the need to prioritise measures to strengthen the foundations for intergovernmental and inter-ministerial coordination and monitoring of the implementation of federalism have also been emphasised. The roadmap that it has suggested may help deliver on common reform objectives and improve coherence and coordination among the three levels of the government. However, the importance of internalisation of federal norms in the employee adjustment practices must not be minimised in this process. Recently, the State 2 government has filed a writ petition at the Supreme Court against the recent policy decision of the federal government regarding employee adjustment. It is seeking repeal of the decision to make further policy arrangements to solve the problem of integration of employees who have already been integrated at the federal, state and local levels. In the name of 'adjustment amendment and reconciliation' of the adjusted employees, the federal government decided to transfer the employees already adjusted under this process, from one state to another, from one local level to another. The state claims it is a little too much. Similarly, the decision made by the government states that the employees who have been integrated into the federal government can be sent to the state and local level. This decision violates the Employees Adjustment Act enacted to regulate the issue of federalisation of the staff of unitary Nepal before the promulgation of the new constitution. Once the adjustment has been made, the federal government has no longer any power under the constitution to administer the employees who have been integrated at the state and local levels. It must be done according to the state law. In current practice, the chief secretary of the state or the secretaries from ministries of the state have been frequently transferred at the whim of the central government. It has not even waited for the court decisions in the employees’ sub judice cases while making in such transfers. The policy decision of the federal government mentions that the dissatisfied employees, who went to the court, can be employed in the same body from where s/he was transferred even while waiting for the final court’s verdict. The petition claims that it would be against the constitution and law to pave the way for their return to the centre without a court decision.
Interference Similarly, Section 14 (1) of the Act says, "Notwithstanding anything contained in the prevailing law, employees who have been adjusted to the service of the State as per this Act may be transferred to the concerned State or its subordinate office after completion of the period prescribed by the State Law." Section 227 of the constitution stipulates that the staffing and office arrangements of the village and municipality shall be in accordance with the State law. Similarly, Section 285 (3) of the constitution states that the State Council of Ministers, Village Executive and Municipalities may form and operate various services as per the law as required to run the administration. The state thus claims that there was no legal basis for the federal government to administer state and local level employees on the basis of non-enactment of provincial laws. The federal government’s interference in the matter of employee adjustment is definitely affecting the quality of civil administration in the newly created states. What worries the states more is the unilateral decisions without prior consultations with the aspiring state and local governments. It is fair to assume on the part of the state that it is difficult to enact the state civil service law until the federal civil service law being considered by the federal parliament is approved and enforced.